The top 13 pay-TV operators in the U.S., which represent around 95% of the total market, lost nearly 1.5 million subscribers in 2017, double 2016’s loss of 760K subscribers, according to Leichtman Research Group. However, the loss would balloon to nearly 3.1 million subscribers after deducting the 1.6 million skinny bundle or “vMVPD” subscribers that were added in 2017. The 3.1 million multichannel subscriber loss is about 62% higher than the 1.9 million lost in 2016. The top 13 pay-TV operators ended 2017 with approximately 92.2 million subscribers.

Satellite operators DirecTV and Dish were hit the hardest, losing around 1.55 million subscribers or 4.7% of their base vs. 40K in ’16 (DirecTV’s share was 554K while Dish Network’s was 995K). Total satellite company losses would be worse if they weren't offset by DirecTV Now and Sling TV total additions of around 1.6 million subscribers for the year. Top telcos lost 885K subscribers, vs. 1.6 million lost in ’16 and top cable TV operators lost 660K, vs. 275K lost in ’16.

2017’s acceleration in cord-cutting will only heighten the debate about multichannel TV’s future in an era increasingly defined by inexpensive SVOD services like Netflix, Amazon and Hulu. As I’ve written many times previously, as the quality of these services has improved, more viewing is shifting to them. As this has occurred, more pay-TV households have begun questioning whether their expensive multichannel service is still worth it, given their reduced viewing. As many of these households have concluded it isn’t, cord-cutting has jumped.

Meanwhile, the adoption of pay-TV service is also under pressure as new households simply choose not to subscribe at all (“cord-nevers”). Many younger viewers, who have steadily built a diet of SVOD plus YouTube over the years, see little reason to sign up for bloated bundles of channels they never watch or may never have even heard of, especially given the high quantity of ads.

Add it all up and the pressure on the traditional ecosystem is higher than ever. Increasingly, skinny bundles, or vMVPDs, look like the answer to engaging cord-cutters and cord-nevers. Despite their low price points, I’ve generally been skeptical of these services’ value propositions, though I’ve started to warm to them recently, especially YouTube TV, which has heavily concentrated on carrying the full lineup of local broadcast TV channels plus sports. However, as has been pointed out by many analysts, skinny bundles’ low price points squeeze their profitability. That in turn makes their sustainability (and therefore ultimate industry contribution) questionable.

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